5 health benefits of proposed new tax on Coke, Bigi, soft drinks

As the Nigerian government is thinking of taxing soft drinks from manufacturing points, medical experts have revealed five health benefits.

According to a 2015 study by the World Health Organisation, WHO, taxation on soft drinks and other sugary drinks is a step in the right direction for healthy living.

“Evidence shows that implementing taxes on sugary drinks leads to reduced consumption of these products. Several countries are well on their way to implementing taxes on sugary drinks,” WHO noted in the research.

Soft drinks in Nigeria (Adewale Osideinde)
The Nigerian government is contemplating of introducing excise tax on soft drinks. (Adewale Osideinde)

In an interesting twist, the minister of finance, Zainab Ahmed, says the federal government is considering introducing excise duty on carbonated drinks to further open up streams of income for the Nigerian Government.

WHO further noted that a major action for comprehensive programmes aimed at reducing consumption of sugars is taxation of sugary drinks.

Here are five health benefits of proposed new tax on Coke, Bigi, soft drinks

1. Prevent obesity

According to WHO research, taxation on sugary drinks is an effective intervention to reduce sugar consumption. Evidence shows that a tax on sugary drinks that rises prices by 20% can lead to a reduction in consumption of around 20%, thus preventing obesity and diabetes

2. Savings on healthcare

Estimates suggest that, over 10 years, a tax on sugary drinks of 1 cent per ounce in the United States of America would result in more than US$ 17 billion in healthcare cost savings. The revenue varies from countries to countries.

3. Promotion of health section

Revenues raised from taxes can be used to promote the health of the population. Revenue generated by these taxes could be spent on efforts to improve health care systems, encourage healthier diets, increase physical activity, or build capacity for effective tax administration, further increasing the value of this measure.

4. Major income stream

This proposed excise tax on carbonated drinks could generate approximately US$ 13 billion in annual tax revenues in the United States of America. Revnue of such magnitude can also be generated in Nigeria if duly followed.

5. Reward system to encourage process

Low-income consumers and young people get the greatest health benefits from taxes. In Mexico, two years after the introduction of a tax on sugary drinks, households with the fewest resources reduced their purchases of sugary drinks by 11.7%, compared to 7.6% for the general population.

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